In today’s business environment, the decisions often must be made in environments that are much more fraught with uncertainty. Here are a few examples.
- A manufacturer introducing a new product into the marketplace. What will be the re-action of potential customers? How much should be produced? Should the product be test marketed in a small region before deciding upon full distribution? How much advertising is needed to launch the product successfully?
- A financial firm investing in securities. Which are the market sectors and individual securities with the best prospects? Where is the economy headed? How about interest rates? How should these factors affect the investment decisions?
- A government contractor bidding on a new contract. What will be the actual costs of the project? Which other companies might be bidding? What are their likely bids?
- An agricultural firm selecting the mix of crops and livestock for the upcoming season. What will be the weather conditions? Where are prices headed? What will costs be?
Our decision optimization services represent a family of business optimization services that delivers prescriptive analytics to help you make better decisions and deliver improved business outcomes.
The services starting with our skillful consultants help to construct the business objectives or business problem to a mathematical model, verify the model with mini-scope pilot run, then assemble and cascade the optimization model to a broader area, and deploy to your system landscape to support on-going optimization needs.
This deployment can be built with open-source solver to commercial solver, which can solve more tough challenges at a fast speed. Together with powerful tools and skills, we can help you to make a better decision by reducing the effort, time, and risks.
The optimization can be different time frequence, for example, the supply chain network optimization could be yearly review, but the financial assets portfolio can be daily, hourly or minutely.
Supply chain network optimization
is the process of finding the optimal combination of facilities, factories, suppliers, products, and distribution centers in the supply chain to ensure the company's supply chain objectives. It is the art and science of designing a quantitative, strategic, and holistic view of the organization’s end-to-end supply chain.
Some example questions that are commonly asked are:
- How do we design the company supply chain network to deliver the required service at the lowest possible cost?
- How can we get the highest level of service for customers at a minimal cost?
- Given a fixed network, how do we determine optimal product sourcing and inventory deployment rules to meet anticipated customer demand?
- Given a logistics network and a defined distribution strategy, how can we best use our available transportation resources?
The end goal is to create the most efficient network possible, meet the demand of customers, and ensure the lowest possible cost to serve your network. There are a number of pieces of information that need to be considered in supply chain network design:
- Demand
- Customer locations
- Supplier locations
- Facilities (both exsting and potential)
- Constraints
- Costs
- Time periods
- Transportation flows
- Inventory storages
- ...
Companies should frequently check the supply chain operation status, and keep watching the signal to trigger the supply chain network optimization. Such a signal could be:
- Acquisition and mergers
- Inventory change
- Operational inefficiencies
- Carbon footprint reduction
- Inability to keep up with diverse customer needs
- Growth and expansion
- Consolidation and Deconsolidation
- New markets
- Volatile markets
- Fragile supply chain network
- Formation of new customer segments
- Sourcing change
- New Product lines launch
Our supply chain optimization service helps to address those challenges with proven methodology and advanced math optimization tools, such as:
- Studying the market that company is in.
- Taking into consideration the strategic decision of company executives and future volume predictions.
- Modeling different variables and models, such as your distribution centers, store network, and possible routes to serve those stores, company products and offers, future volume predictions etc.
- Evaluating the model and assessment.
- The supply chain network design.
Financial Assets Portfolio Optimization
is based on Modern Portfolio Theory (MPT), which is based on the investment principle that investors want to obtain the highest return with the lowest risk. To achieve this goal, an optimal MPT-based portfolio needs to be highly diversified to avoid crashes when a particular asset or asset class underperforms, and to select assets with as low a correlation as possible.
The modern asset market is becoming increasingly dynamic. Market participants who manage asset portfolios need advanced optimization decision-making mechanisms to help manage asset portfolios in order to achieve expected returns. Relying on our advantages in optimization decision-making modeling, we can provide asset management institutions with customized portfolio optimization system models to enrich the optimization decision-making mechanism of asset management institutions.
Our asset portfolio optimization services is shown in the following figure:
A typical portfolio optimization customization include:
- Expected Return Estimation
- Risk estimates (e.g. covariance of asset returns)
- The objective function to be optimized
- Optimizer (IBM ILOG optimizer is recommended)
For example the covariance between different assets.
The better covariance matrix with shrinkage, which reduce the extreme values in the covariance matrix.
Also the efficient frontier, it can generate the classic efficient frontier with random portfolios, help asset manager to grasp the most like results look like.
Thre are more functionalities coming for user requirements, but the key success factors to customers are:
- analyze the economic events on the risk of the portfolio continuously.
- improve portfolio structure to balance the risk and revenue generating.
Comparing other similar portfolio analysis tools, our solution and service are more flexible to adapt to your business environment, and keep your secret optimization within your control.